US economy grows again in 3rd quarter, best showing in 2 years signals end of recession
The U.S. economy grew at a 3.5 percent pace in the third quarter, the best showing in two years, fueled by government-supported spending on cars and homes. It's the strongest signal yet that the economy has entered a new, though fragile, phase of recovery and that the worst recession since the 1930s has ended.
Going forward, many analysts expect the pace of the budding recovery to be plodding due to rising unemployment and continuing difficulties by both consumers and businesses to secure loans.
"This welcome milestone is just another step, and we still have a long road to travel until the economy is fully recovered," said Christina Romer, President Barack Obama's chief economist. "It will take sustained, robust ... growth to bring the unemployment rate down substantially. Such a decline in unemployment is, of course, what we are all working to achieve."
The much-awaited turnaround reported Thursday by the Commerce Department ended the streak of four straight quarters of contracting economic activity, the first time that's happened on records dating to 1947.
It also marked the first increase since the spring of 2008, when the economy experienced a short-lived uptick in growth.
On Wall Street, the news lifted stocks. The Dow Jones industrials gained nearly 110 points in midday trading and broader indices also rose.
The third-quarter's performance -- the strongest since right before the country fell into recession in December 2007 -- was slightly better than the 3.3 percent growth rate economists expected.
Armed with cash from government support programs, consumers led the rebound in the third quarter, snapping up cars and homes.
Consumer spending on big-ticket manufactured goods soared at an annualized rate of 22.3 percent in the third quarter, the most since the end of 2001. The jump largely reflected car purchases spurred by the government's "Cash for Clunkers" program that offered a rebate of up to $4,500 to buy new cars and trade in old gas guzzlers.
The housing market also turned a corner in the summer. Spending on housing projects jumped at an annualized pace of 23.4 percent, the largest jump since 1986. It was the first time since the end of 2005 that spending on housing was positive. Purchases of home furnishings and appliances also added to economic growth.
The government's $8,000 tax credit for first-time home buyers supported the housing rebound. Congress is considering extending the credit, which expires on Nov. 30.
Thursday, October 29, 2009
Friday, October 23, 2009
Markets end flat as heavyweights disappoint...
After yesterday's over 200 points fall, the Sensex opened on an absolutely flat note at 16,796.
Strong global cues gave a fillip to the BSE index and the Sensex soared 217 points to a high of 17,007. However, significant selling pressure in India's most valuable company, Reliance, coupled with capital goods majors - BHEL and Larsen & Toubro - dragged the market down to a low of 16,765 - down 242 points. The Sensex finally ended with a marginal gain of 21 points at 16,811.
The Nifty ended flat at 4,997 - up eight points.
The market breadth was almost neutral. Out of 2,851 shares traded 1,414 advanced while 1,327 declined.
INDEX SHAKERS...
Sensex heavy-weight, Reliance dropped over 4% to Rs 2,047 - which resulted to a 95 points loss for the Sensex. The stock slipped after its partner's Hardy Oil announced plans to abandon one of its well from the KG basin field. According to reports, Hardy Oil stock tumbled around 36%, while the company held 10% stake in the said well, the balance stake is held by Reliance. On its part, however, Reliance clarified that work is on on the said field, and further clarifications will be done later.
Grasim shed 3% to Rs 2,150. Larsen & Toubro slipped for the second day after its Q2 results. The stock dipped 2.3% to Rs 1,571.
Tata Motors, Tata Steel, Bharti Airtel, BHEL, Reliance Infrastructure, Hero Honda and Reliance Communications were the other index losers.
...AND THE MOVERS
FMCG major, ITC, jumped 5% to Rs 260 on better-than-expected Q2 numbers. Mahindra & Mahindra and Maruti Suzuki added over 2% each to Rs 926 and Rs 1,517, respectively.
IT stocks held on to gains. Infosys, TCS and Wipro moved up 2% each to Rs 2,260, Rs 641 and Rs 589, respectively.
Banking stocks like ICICI Bank, HDFC Bank and SBI contributed to the index's upmove through the day. ICICI Bank and HDFC Bank advanced 1.5% each while SBI was up 1.2%
Strong global cues gave a fillip to the BSE index and the Sensex soared 217 points to a high of 17,007. However, significant selling pressure in India's most valuable company, Reliance, coupled with capital goods majors - BHEL and Larsen & Toubro - dragged the market down to a low of 16,765 - down 242 points. The Sensex finally ended with a marginal gain of 21 points at 16,811.
The Nifty ended flat at 4,997 - up eight points.
The market breadth was almost neutral. Out of 2,851 shares traded 1,414 advanced while 1,327 declined.
INDEX SHAKERS...
Sensex heavy-weight, Reliance dropped over 4% to Rs 2,047 - which resulted to a 95 points loss for the Sensex. The stock slipped after its partner's Hardy Oil announced plans to abandon one of its well from the KG basin field. According to reports, Hardy Oil stock tumbled around 36%, while the company held 10% stake in the said well, the balance stake is held by Reliance. On its part, however, Reliance clarified that work is on on the said field, and further clarifications will be done later.
Grasim shed 3% to Rs 2,150. Larsen & Toubro slipped for the second day after its Q2 results. The stock dipped 2.3% to Rs 1,571.
Tata Motors, Tata Steel, Bharti Airtel, BHEL, Reliance Infrastructure, Hero Honda and Reliance Communications were the other index losers.
...AND THE MOVERS
FMCG major, ITC, jumped 5% to Rs 260 on better-than-expected Q2 numbers. Mahindra & Mahindra and Maruti Suzuki added over 2% each to Rs 926 and Rs 1,517, respectively.
IT stocks held on to gains. Infosys, TCS and Wipro moved up 2% each to Rs 2,260, Rs 641 and Rs 589, respectively.
Banking stocks like ICICI Bank, HDFC Bank and SBI contributed to the index's upmove through the day. ICICI Bank and HDFC Bank advanced 1.5% each while SBI was up 1.2%
Thursday, October 22, 2009
Leading US economic indicators rise again in Sept.
Leading US economic indicators rise for 6th straight month in Sept., point to growth next year
A private forecast of US economic activity rose for the sixth straight month in September, a sign the economy will keep growing next year.
The Conference Board's index of leading economic indicators rose 1 percent last month after a 0.4 percent gain in August. Wall Street economists expected an increase of 0.8 percent last month, according to a survey by Thomson Reuters.
Economists expect the economy grew about 3 percent in the third quarter after falling for a record four straight quarters. But many wonder if that pace can continue in the current quarter and next year as unemployment rises and consumers remain hesitant to spend.
The Conference Board index's six-month growth rate through September was the strongest since 1983, but joblessness was weighing on the recovery.
A private forecast of US economic activity rose for the sixth straight month in September, a sign the economy will keep growing next year.
The Conference Board's index of leading economic indicators rose 1 percent last month after a 0.4 percent gain in August. Wall Street economists expected an increase of 0.8 percent last month, according to a survey by Thomson Reuters.
Economists expect the economy grew about 3 percent in the third quarter after falling for a record four straight quarters. But many wonder if that pace can continue in the current quarter and next year as unemployment rises and consumers remain hesitant to spend.
The Conference Board index's six-month growth rate through September was the strongest since 1983, but joblessness was weighing on the recovery.
Wednesday, October 21, 2009
US Corporate Results...
Morgan Stanley profit ends losing streak
Eli Lilly posts 3Q profit ahead of predictions
Boeing posts $1.6BM loss for 3Q on plane charges
Continental loses $18 million in third quarter
Wells Fargo 3Q profit rises to $3.2 billion
Eli Lilly posts 3Q profit ahead of predictions
Boeing posts $1.6BM loss for 3Q on plane charges
Continental loses $18 million in third quarter
Wells Fargo 3Q profit rises to $3.2 billion
Friday, October 9, 2009
Infosys profit falls 0.9 pct but outlook improves
Infosys Technologies Ltd. reported a slight decrease in quarterly profit today but raised its revenue forecast -- a sign the worst may be over for India's software services industry after being hard hit by the global downturn.
Infosys, India's second largest outsourcing firm, said net income fell 0.9 percent, to $317.0 million in the quarter ended Sept. 30 based on international accounting standards, beating its own forecast.
Revenues for the period were $1.15 billion, a 5.1 percent decline from the same period a year ago but a 2.9 percent improvement from the prior quarter.
"The business climate has improved," said Infosys chief executive S. Gopalakrishnan. "Clients are now looking to invest in a few strategic initiatives."
Infosys said it expects revenues for the fiscal year to be $4.6 billion to $4.62 billion, about 1 percent less than last year, but a more optimistic forecast than it made in July.
The company said it has boosted its cash holdings to $2.8 billion, added 35 new clients and 1,548 employees during the quarter.
Infosys, India's second largest outsourcing firm, said net income fell 0.9 percent, to $317.0 million in the quarter ended Sept. 30 based on international accounting standards, beating its own forecast.
Revenues for the period were $1.15 billion, a 5.1 percent decline from the same period a year ago but a 2.9 percent improvement from the prior quarter.
"The business climate has improved," said Infosys chief executive S. Gopalakrishnan. "Clients are now looking to invest in a few strategic initiatives."
Infosys said it expects revenues for the fiscal year to be $4.6 billion to $4.62 billion, about 1 percent less than last year, but a more optimistic forecast than it made in July.
The company said it has boosted its cash holdings to $2.8 billion, added 35 new clients and 1,548 employees during the quarter.
Wednesday, October 7, 2009
RIL consolidated FY09 net at Rs 15,296 cr
Mukesh Ambani group firm Reliance Industries (RIL) today reported a consolidated net profit of Rs 15,296 crore for the year ended March 31, 2009.
The company had registered a net profit of Rs 15,324 crore (from ordinary activities) in the FY08, the company stated in a filing to the Bombay Stock Exchange.
The announcement of audited financial results for 2008-09 came late as the merger of Reliance Petroleum with RIL was awaiting regulatory and court approvals.
The figures include those of Reliance Petroleum (RPL), which amalgamated with the company with effect from April 1, 2008 and are therefore, not comparable with those of previous year, the company said in the filing.
The net turnover of the company stood at Rs 1,51,224 crore for the year ended March 31, 2009, whereas it was Rs 1,37,147 crore a year-ago.
RIL has also proposed a dividend of Rs 13 per fully paid-up equity shares of Rs 10 each aggregating to Rs 2,219 crore, including the dividend distribution tax, the filing added.
The board has considered dividend on the shares issued to the shareholders erstwhile RPL as well.
The RIL board also approved a bonus issue of one share for each share held in the company, subject to the approval of the shareholders.
Further, the provision for current tax for the year ended March 31, 2009, includes provision for Fringe Benefit Tax of Rs 57 crore.
On standalone basis, RIL's audited net profit stood at Rs 15,309 crore for 2008-09, whereas it was Rs 19,458 crore in the previous year.
The company's standalone net turnover was Rs 1,41,847 crore in the last fiscal, while it was Rs 1,33,443 crore in 2007-08.
During the year, the company announced a voluntary separation scheme for the employees of Patalganga unit and about 430 employees had accepted the VSS.
The company said in the filing that it has recognised Rs 370 crore towards liabilities on account of corporate guarantees issues on behalf of a subsidiary, being an exceptional item.
In the previous year, exceptional item of Rs 4,733 crore represent gains primarily arising out of transactions concerning Reliance Petroleum shares.
Shares of RIL closed down 1.57 per cent at Rs 2,099 on the Bombay Stock Exchange.
The company had registered a net profit of Rs 15,324 crore (from ordinary activities) in the FY08, the company stated in a filing to the Bombay Stock Exchange.
The announcement of audited financial results for 2008-09 came late as the merger of Reliance Petroleum with RIL was awaiting regulatory and court approvals.
The figures include those of Reliance Petroleum (RPL), which amalgamated with the company with effect from April 1, 2008 and are therefore, not comparable with those of previous year, the company said in the filing.
The net turnover of the company stood at Rs 1,51,224 crore for the year ended March 31, 2009, whereas it was Rs 1,37,147 crore a year-ago.
RIL has also proposed a dividend of Rs 13 per fully paid-up equity shares of Rs 10 each aggregating to Rs 2,219 crore, including the dividend distribution tax, the filing added.
The board has considered dividend on the shares issued to the shareholders erstwhile RPL as well.
The RIL board also approved a bonus issue of one share for each share held in the company, subject to the approval of the shareholders.
Further, the provision for current tax for the year ended March 31, 2009, includes provision for Fringe Benefit Tax of Rs 57 crore.
On standalone basis, RIL's audited net profit stood at Rs 15,309 crore for 2008-09, whereas it was Rs 19,458 crore in the previous year.
The company's standalone net turnover was Rs 1,41,847 crore in the last fiscal, while it was Rs 1,33,443 crore in 2007-08.
During the year, the company announced a voluntary separation scheme for the employees of Patalganga unit and about 430 employees had accepted the VSS.
The company said in the filing that it has recognised Rs 370 crore towards liabilities on account of corporate guarantees issues on behalf of a subsidiary, being an exceptional item.
In the previous year, exceptional item of Rs 4,733 crore represent gains primarily arising out of transactions concerning Reliance Petroleum shares.
Shares of RIL closed down 1.57 per cent at Rs 2,099 on the Bombay Stock Exchange.
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